Refinancing Property Acquired in an Exchange

Refinancing Property Acquired in an Exchange

Refinancing properties allows real estate owners to presently benefit from their properties’ appreciation on a tax deferred basis. Because the borrower is obligated to repay the refinancing loan, refinancing a property by itself does not increase the borrower’s wealth and, therefore, does not result in taxable income. Rather, the borrower will only have taxable income if and when it sells the refinanced property in a taxable sale. However, if the property being refinanced was recently acquired in a section 1031 exchange, there is a risk that the net refinancing proceeds will be treated as unused proceeds from the sale of the relinquished property, which will result in taxable “boot”.

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Considerations for Out-of-State 1031 Exchanges

Considerations for Out-of-State 1031 Exchanges

In the 1031 exchange industry, we often come across clients looking to reposition or restructure their real estate portfolios. 1031 exchanges can be an effective solution because they allow investors to preserve the value of their invested capital through tax deferral.

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Using a Tenants in Common Structure in Your 1031 Exchange

Using a Tenants in Common Structure in Your 1031 Exchange

Tenants in common (also known as tenancy in common or TIC) is a type of ownership agreement that allows multiple investors to jointly purchase a single property. Each investor owns an undivided interest in the property and typically receives proportionate interest in income and growth.

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Depreciation Recapture Issues in 1031 Exchanges

Depreciation Recapture Issues in 1031 Exchanges

Many in the real estate industry are familiar with the term “cost segregation study.”  A cost segregation study identifies components within buildings that can be depreciated over shorter periods than the 27.5 and 39-year periods that typically apply to real estate.  

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1031 Exchange Trends for 2024

1031 Exchange Trends for 2024

As we navigate through 2024, the 1031 Exchange landscape is evolving, driven by a combination of market forces and investor behaviors. This year, several key trends are emerging that are reshaping the way investors approach these transactions.

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This information is intended as general guidance only and may or may not apply to a particular situation based on the circumstances. Genesis Bank makes no claims or guarantees regarding the accuracy or timeliness of this information.